Opinion polls:
4) Asahi poll: 76 PERCENT of Japanese agree the global environment
is "sick" and 48 PERCENT are willing to pay an increased "green
tax" to protect the environment (Asahi)
5) Mainichi poll finds 46 PERCENT of voters expect Democratic Party
of Japan (DPJ) to win the Lower House in the next election, while
only 33 PERCENT see the LDP winning (Mainichi)

Political agenda:
6) Prime Minister Fukuda postpones cabinet shuffle in order to
prevent turmoil in the Diet (Mainichi)
7) DPJ's Naoto Kan say his party is likely to present a censure
motion against the prime minister in March (Asahi)
8) Ruling camp wants to put off Diet dissolution and snap election
until the fall or later, but DPJ determined to force an early
dissolution in the spring (Tokyo Shimbun)
9) 768 political candidates prepared to run in the next Lower House
election, with LDP, DPJ to clash head on in 218 districts
(Mainichi)
10) Government planning to establish a "consumer agency" to unify
administration because of the rash of major fraud and deception
cases (Tokyo Shimbun)

11) Government readying a "peace settling" contribution to Africa by
initiating a program to cultivate PKO personnel (Mainichi)

Defense and security affairs:
12) When Indian Ocean refueling restarts, government plans to sign
official memos with recipient countries, including U.S., to ensure
no diversion for other purposes (Nikkei)
13) Defense Ministry sounds out U.S. forces about postponing
disclosure of oil supplying out of consideration for ongoing Diet
deliberations (Sankei)
14) Next mid-term defense buildup program to be advanced one year
and start in fiscal 2009 (Mainichi)
15) MSDF's missile-intercepting warship deployed to Sasebo (Nikkei)

16) Bill to establish general law on overseas dispatch of SDF to be
presented to the Diet in the fall extra session of the Diet (Asahi)

17) Government is considering easing three weapons-export
restrictions to allow MD-related joint development (Tokyo Shimbun)

18) President of Abu Dhabi National Oil Company hints to visiting
METI minister that Japan's oil-development rights may be extended
(Nikkei)

16:00
Met at his official residence with Deputy Chief Cabinet Secretary
Futahashi.

21:08
Returned to his private residence in Nozawa.

Prime Minister's schedule, January 6

NIKKEI (Page 2) (Full)
January 7, 2008

Spend the whole day at his private residence in Nozawa.

4) Poll: 76 PERCENT see global environment as "sick"

ASAHI (Page 2) (Abridged)
January 7, 2008

Three out of every four persons believe the earth is now "sick," the
Asahi Shimbun found from its face-to-face public opinion survey
conducted across the nation on Nov. 17-18 last year about public
life and the earth's environment. More people think that the global
environment is now worsening. More than 90 PERCENT are worried
about global warming. The Kyoto Protocol mandates Japan to reduce 6
PERCENT of its greenhouse gas emissions from 1990 levels. In the
survey, 78 PERCENT said Japan should do so without fail. As seen
from these figures, the public is highly concerned about the
environment.

The survey probed public awareness of global warming, as well as the
public's evaluation of society and human behavior.

In the survey, the condition of the earth's environment was likened
to human health. A total of 76 PERCENT answered that they thought
the earth was "seriously ill" or "ill." The proportion of those
thinking the earth is seriously ill was 16 PERCENT , showing an
increase from 7 PERCENT in a previous survey taken 10 years ago and
from 12 PERCENT in a survey taken five years ago.

A total of 92 PERCENT were "very" or "somewhat" worried about
global warming, with 93 PERCENT feeling that climate change is
already beginning with global warming.

In the survey, respondents were further asked if they should change
their lifestyle to prevent global warming. To this question, a total
of 96 PERCENT said "very much" or "somewhat." However, "very much"
accounted for only 50 PERCENT .

5) Poll: 46 PERCENT want DPJ to win next general election

MAINICHI (Top play) (Abridged)
January 7, 2008

The Mainichi Shimbun conducted a telephone-based public opinion
survey in December last year. In that survey, respondents were asked
which political party between the Liberal Democratic Party and the
Democratic Party of Japan (Minshuto) they would like to see win in
the next election for the House of Representatives. In response to
this question, 46 PERCENT opted for the DPJ, with 33 PERCENT
choosing the LDP. "Other political parties" accounted for 13 PERCENT
, and "no answer" at 9 PERCENT . In last July's election for the

TOKYO 00000028 005 OF 012

House of Councillors, the DPJ made great strides and the LDP
suffered a crushing defeat. The DPJ is now outpacing the LDP. The
figures show that the public is critical of the LDP due to the
government's pension record-keeping flaws and the Defense Ministry's
scandals.

This question was asked in the last five surveys. The DPJ was above
the LDP in all those surveys. In a survey taken in August last year
right after the House of Councillors election, the DPJ stood at 44
PERCENT , with the LDP at 37 PERCENT . As seen from these figures,
the LDP was 7 points behind the DPJ.

In the three surveys conducted between September and October, the
gap narrowed to 4-5 points. In the latest survey, however, it
increased to 13 points.

Respondents were also asked which political party they supported. In
response to this question, 26 PERCENT chose the LDP, with 27
PERCENT opting for the DPJ. In view of these results, non-DPJ
supporters also have expectations for the DPJ.

Prime Minister Yasuo Fukuda decided to put off a cabinet shuffle he
had planned to carry it out before the regular session of the Diet,
which is slated to be convened on Jan. 18. The reason is that Fukuda
has determined that the shuffling of cabinet members would not add
to strengthening the cohesiveness of his government and that
dissatisfaction would only grow in the Liberal Democratic Party
(LDP), centering on those who did not get appointed as ministers. He
wanted to make an effort to display his own political identity by
shuffling his cabinet since approval ratings for his cabinet had
plunged due to such issues as the pension-records mess, but in the
end, he has decided to give up on his plan. Moreover, there is
insufficient time left to shuffle the cabinet due to the tight
political schedule.

Fukuda said during his China trip late last year: "I want to give
good consideration to next year's schedule. There are various views
in the party. I think they are understandable." Apparently accepting
calls for a cabinet shuffle in the LDP, he at that time expressed
his intention to shuffle it before the start of the regular Diet
session.

Concerning the possible introduction of a censure motion against the
prime minister to the Upper House, Democratic Party of Japan (DPJ or
Minshuto) Deputy President Naoto Kan on a TV talk show on Jan. 6
revealed that his party is planning to do so around March, when
budget deliberations in the regular Diet session are expected to
come to a head. He said, "Our basic strategy is to corner the Fukuda
administration in budget deliberations to dissolve the Lower House,
backed by public opinion calling for a change of administration."

TOKYO 00000028 006 OF 012

Kan indicated a negative stance to the possibility of introducing a
censure motion during the extraordinary Diet session, saying, "We
will not automatically decide to introduce a censure motion just
because the ruling camp has used its two-thirds majority to adopt
the refueling assistance special measures legislation by putting it
to a vote again in the Lower House."

8) Influential ruling camp lawmakers making statements one after the
other about Diet dissolution in the fall or later; Democratic Party
of Japan continues endurance contest

TOKYO SHIMBUN (Page 2) (Excerpts)
January 7, 2008

On the issue of the timing of the next House of Representatives
election, influential lawmakers in the ruling parties have been
making statements one after the other that is should be put off
until after the G8 Summit at Lake Toya in Hokkaido. With the
government and ruling parties at a disadvantage due to such issues
as the missing pension records and the case of corruption by a
former defense vice minister, their aim is to constrain the DPJ from
becoming even more adamant for an early dissolution of the Diet.

"Since we already have a two-thirds majority, the universal thinking
(in the party) is the later the better (for an election)," said
Liberal Democratic Party Secretary General Ibuki on an NHK
television talk show on the 6th. He indicated that a Lower House
election should be put off if possible.

However, DPJ President Ozawa has said, "The earlier that Diet
dissolution is carried out the better." He intends to press the
government for an early dissolution. The DPJ plans to file a censure
motion against the prime minister in March and try to force him to
dissolve the Lower House.

9) 768 preparing to run in next Lower House election; LDP, DPJ
candidates to compete directly in 218 districts

MAINICHI (Top Play) (Slightly abridged)
January 5, 2008

As of Jan. 4 at least 768 persons are now making preparations for
filing their candidacies for the next House of Representatives
election, according to a survey by the Mainichi Shimbun. The survey
has found that the number of candidates to run in the race is
expected to be greatly lower than the 1,131 who ran in the 2005
Lower House election. The number is the lowest since 1996, when the
mixed-electoral system of single-seat and proportional
representation constituencies was established, and reflects the
decision of the Japanese Communist Party (JCP) to change its policy
of filing candidates in all the single-seat electoral districts
across the nation.

Chances are that the next Lower House election will be conducted
before the end of this year. This will be the first large-scale
election for Prime Minister Yasuo Fukuda since he took office. The
focus will be on a battle between the ruling Liberal Democratic
Party (LDP), which won a landslide victory in the previous race, and
the largest opposition Democratic Party of Japan (DPJ or Minshuto),
which leaped ahead in the 2007 House of Councillors election (to win
control).

TOKYO 00000028 007 OF 012

A total of 701 candidates are expected to run in the single-seat
electoral district races, and 67 (excluding candidates running in
both single-seat and proportional representation constituencies)
will seek to win proportional representation seats. The LDP will
field 314 candidates -- 290 in the single-seat constituencies and 24
in the proportional representation segment.

The LDP basically intends to file candidates in all single-seat
districts, excluding those in which the New Komeito is expected to
field candidates. However, there still remain single-seat
constituencies in which coordination is needed between incumbents
and former "postal rebels."

The DPJ, which does not allow its candidates to run in both
single-seat and proportional representation constituencies, has now
lined up 232 candidates, aiming at fielding about 270 in the end.
However, the party has been delayed in selection candidates for the
Tokyo and Kyushu areas. The LDP and DPJ are expected to face off in
218 single-seat constituencies (including sponsored candidates), but
the number will likely increase.

10) Government considering the establishment of a "consumer agency"
in order to unify administration as incidents of fraud and deceit
continue

TOKYO SHIMBUN (Top play) (Abridged)
January 5, 2008

The government in response to the rash of incidents involving fraud
and deceit related to food items, housing, and the like, has decided
to give consideration to establishing a "consumer agency" that would
unify administration of consumer affairs now under each ministry.

Administration of consumer affairs is now under the jurisdiction of
the Cabinet Office, but specific responsibilities are under the
Ministry of Health, Welfare and Labor (Food Sanitation Law) for such
aspects as product shelf-life, and the Ministry of Agriculture,
Forestry, and Fisheries (JAS or Japan Agricultural Standards Law).
Such an arrangement has been pointed out to be a hindrance.

The government is now proceeding with a complete examination of the
current system, including the legislation that affects consumers. In
order to protect consumers from being harmed by the series of fraud
and deceit cases, the judgment has been made that it is necessary to
unify consumer administration under one organ.

The Liberal Democratic Party's (LDP) Research Committee on Consumer
Affairs (chaired by Seiko Noda) also in an interim report expected
to come out in March will call for the establishment of a consumer
affairs agency in fiscal 2009.

However, there are voices of caution about such a move, saying that
setting up a new agency would run counter to administrative reform,
so the possibility exists that the for the time being, the effort
will stop at beefing up the administrative coordinating function of
the Cabinet Office over the other ministries.

11) Japan decides to assist in personnel training for PKO in Africa
as part of "consolidation of peace"

MAINICHI (Page 5) (Full)
January 5, 2008

TOKYO 00000028 008 OF 012

Ken Uzuka

The government decided to help train personnel for United Nations
peacekeeping operations (PKO) in Africa. This aid is intended to
bring into shape "consolidation of peace," a major subject for the
upcoming 4th Tokyo International Conference on Africa's Development
(TICAD) in Yokohama slated for May. The government will announce
this aid as its new international contribution. It plans to
facilitate peace-building by helping to educate and train personnel
from African nations.

When it comes to PKOs in Africa, preparations are underway to send
the largest number of personnel (some 26,000 persons) to Sudan where
the Darfur dispute is serious, and there are also PKOs in Liberia
and Cote d'lvoire.

The conditions for Japan to send its Self-Defense Forces (SDF)
abroad under the PKO Cooperation Law include the existence of an
agreement on a cease-fire and the affected countries' consent to the
dispatch of the SDF. Because Japan is not allowed to mobilize the
SDF in an area of strife, it has decided to give help to PKO centers
in five locations, including Kenya.

Specifically, Japan plans to provide police officers and military
personnel from African countries knowledge and technology related to
(1) the International Humanitarian Law, (2) emergency medical care,
and (3) removal of land mines.

"This will be a new type of assistance to PKOs that will not be
involved in disputes," a senior Foreign Ministry official said.
Japan will explain the idea and results of this aid to the 4th
TICAD. Japan will appropriate 1.8 billion yen for this aid in its
2007 supplementary budget and provide it via the UN Development
Plan.

12) Japan to exchange notes banning fuel diversion

NIKKEI (Page 1) (Abridged)
January 7, 2008

The Diet is now certain to enact a new antiterror bill in order for
Japan to resume the Maritime Self-Defense Force's refueling
activities in the Indian Ocean. Meanwhile, the government decided to
exchange official notes with foreign countries to prevent
MSDF-supplied fuel from being used for other purposes. The
government will ask these countries to provide information about
their vessels receiving MSDF fuel and will record MSDF fuel supplies
to these foreign vessels.

The House of Councillors, where the opposition parties hold a
majority of the seats, is about to vote down the new legislation.
After that, the House of Representatives is expected to vote again
on the bill and the ruling parties will enact it by a majority of
two-thirds. The government will ready the MSDF to resume refueling
activities as soon as the bill clears the Diet.

The exchange of notes is intended to confirm intergovernmental
agreements. The new bill limits the MSDF's refueling mission to
maritime interdiction operations (MIO) conducted in Afghanistan for
antiterror mop-up operations. The government will specify this in
its official notes so that MSDF-supplied fuel will not be used for

TOKYO 00000028 009 OF 012

other military operations.

The MSDF carried out refueling activities under the Antiterror
Special Measures Law that expired in November last year.
MSDF-supplied fuel, however, was allegedly used for U.S. military
operations against Iraq. The opposition parties grilled the
government over this allegation in the Diet during its current
session. The government had exchanged official notes with 11
countries on these refueling activities. However, those exchanges of
notes did not specify anything in detail to prevent fuel diversion.

The Defense Ministry plans to stage an MSDF fuel supply ship in the
Indian Ocean in late February after the new bill is enacted into
law. Ahead of MSDF refueling activities there, the Foreign Ministry
would like to exchange official notes with the United States,
Britain, France, Germany, New Zealand, and Pakistan.

13) Defense Ministry found to have put out feeler to U.S. last fall
about possibility of delaying fuel information disclosure: Out of
concern about impact on Diet deliberations?

SANKEI (Page 1) (Excerpts)
January 7, 2008

Question-and-answer sessions were held in the Diet in October last
year over the use of the fuel Maritime Self-Defense vessels supplied
to U.S. warships in the Indian Ocean. In a related development,
Sankei Shimbun learned on Jan. 4 that a senior Defense Ministry
official informally sounded out the U.S. as to whether it would be
possible to delay procedures for disclosing information on the U.S.
warships involved. The official appears to have floated the
suggestion out of concern about the possible impact of the
disclosure of such information on Diet deliberations. However, the
U.S. forces reportedly disclosed the information, based on its
regular investigative process.

According to a Defense Ministry source, the official met at the
Defense Ministry in October last year with U.S. forces Japan
visitors. On that occasion, the U.S. was receiving a flurry of
requests for disclosure of the logbooks of its Navy warships that
have been participating in Operation Iraqi Freedom, and the Defense
Ministry also receiving requests for disclosing information on
logbooks of MSDF warships dispatched to the Indian Ocean.

The Defense Ministry during the meeting sounded out the U.S.
military officers as to a possibility of the U.S. taking more time
in disclosing the information by investigating more cautiously. The
U.S. side reportedly stopped short of making a clear-cut reply.

Since late September last year, Japan's Peace Depot and other civic
groups have been asking the U.S. to disclose information in
compliance with its Information Disclosure Act via the Internet or
by air mail. The records of the activities of the U.S. Navy's
warships disclosed have given rise to the suspicion that U.S. oilers
that received fuel from a MSDF supplier in the Indian Ocean refueled
U.S. aircraft carriers that took part in the Operation Iraqi
Freedom, an activity the Anti-terrorism Special Measures Law does
not envisage.

Opposition parties had harshly pursued factual situations to bring
the matter to light.

TOKYO 00000028 010 OF 012

The senior official who sounded out the U.S. military was in a
position of receiving reports through the MSDF on requests for
information disclosure that the Peace Depot had filed. This official
said that he did not have personal information on the persons who
had made the requests, saying that he had not received a report on
whether the requests were made by persons connected to civic groups
or not.

14) Government, ruling parties to shorten current Midterm Defense
Buildup Program by one year to play up their reform-oriented
posture

MAINICHI (Page 1) (Excerpts)
January 5, 2008

The government and ruling parties decided yesterday to draw up the
next Midterm Defense Buildup Program, the country's defense plan
stipulating its total defense outlays and defense equipment policies
for a five-year period, one year earlier. The plan is to make fiscal
2009 the initial year for the next program by shortening the current
program covering fiscal 2005-2009 by one year. The aim is to play up
the government's reform posture in the wake of a series of scandals
involving the Ministry of Defense. Cuts in the number of personnel
and procurement costs will be the focus.

The current five-year program was adopted by the cabinet in December
2004. The total defense outlay for the program covering fiscal
2005-2009 is set at 24.24 trillion yen, including the introduction
of the next-generation mainstay combat aircraft.

But MOD has been hit by a series of improprieties, such as a bribery
case involving former Administrative Vice-Defense Minister Takemasa
Moriya and a leak of data on the Aegis system. Establishing the MOD
Reform Council last December, the government has been discussing a
review of the defense procurement system, information security,
securing civilian control, and other matters.

A senior MOD official said: "The government should draw up the next
Midterm Defense Buildup Program ahead of schedule to reflect
full-fledged organizational reform in it." The government and ruling
parties intend to put together the defense program for the next term
by late fiscal 2008 based on an organizational review interim report
to be produced by the MOD Reform Council in February.

15) Antimissile destroyers to be deployed at Sasebo

NIKKEI (Page 2) (Full)
January 5, 2008

The Maritime Self-Defense Force's Aegis destroyer Kongo returned to
its home port in Sasebo yesterday after a successful missile
interception test with a Standard Missile-3 (SM-3) system last month
in airspace over the Pacific Ocean near Hawaii. It will play a role
in intercepting incoming missiles at sea in a missile defense (MD)
system.

The Ministry of Defense plans to install SM-3 missiles on three
Aegis destroyers to establish a system of four ships: three in
Sasebo and Maizuru on the Sea of Japan side and one in Yokosuka on
the Pacific Ocean side.

16) Government envisions submission of permanent legislation for SDF

TOKYO 00000028 011 OF 012

overseas activities to extraordinary Diet session set for fall

ASAHI (Page 2) (Excerpts)
January 6, 2008

Keiichi Kaneko

The government decided to start full-fledged discussion on general
legislation (permanent law) that would allow the Self-Defense Forces
(SDF) to operate abroad beyond the framework of United Nations
peacekeeping operations, envisioning a submission of such
legislation to the extraordinary Diet session slated for the fall.
The legislation would allow the government to dispatch the SDF
abroad if there are UN resolutions or requests from international
bodies, but it would mandate the government to obtain prior approval
of the dispatch from the Diet. In this connection, the government
intends to discuss the relaxation of weapons-use criteria. The
government intends to enter discussion with the ruling bloc about
these ideas. On this sort of general legislation, the ruling
(Liberal Democratic Party (LDP)) already reached agreement in
party-head talks last year with the major opposition Democratic
Party of Japan's (DPJ) President Ichiro Ozawa on the view that such
legislation would be necessary. The government intends to call on
the DPJ to join policy discussion on the legislation.

Prime Minister Fukuda in his New Year's press conference on Jan. 4
stressed the need for the general legislation, noting: "I think it
is a good idea to establish a system for Japan to proactively and
swiftly take part in international peace cooperation. In order to
realize that, an idea of creating a permanent law has been
previously floated. I, too, have a similar idea." Expressing his
hope for the Diet to have a lively debate on such a law, Fukuda
said, "I hope to see the Diet fully discuss what system will be good
for the assumption of various activities."

17) Government considering relaxing three rules banning weapons
exports to allow joint development

TOKYO SHIMBUN (Top play) (Excerpts)
January 6, 2008

The government began discussions yesterday on relaxing the country's
three principles banning weapons exports. Under discussion is the
option of lifting the ban on jointly developing and producing
weapons with other countries and exporting weapons to such
countries. Currently the only exception is Japan's joint project
with the United States on missile defense (MD). The government's
Ministry of Defense (MOD) Reform Council will conduct full-fledged
discussions on the matter in tandem with a review of the defense
equipment procurement system.

The government first came up with the three principles in 1967
prohibiting the country from exporting weapons to communist
countries and warring parties only. In 1976, the government expanded
the area of prohibition, totally banning exports in effect.

At present, the only exception to the rules is the exporting of
parts to the United States under an agreement on joint development
of MD technology.

However, in the process of Reform Council discussion of the scandal
involving a former vice-defense minister, it was pointed out that

TOKYO 00000028 012 OF 012

Japan's defense equipment procurement costs are higher than any
other countries. The government thinks that if Japan is allowed to
engage in joint development with other countries, the arrangements
would help increase the international competitiveness of Japan's
defense industry and lower the high cost of defense-equipment
development. It would also pave the way for Japan joining joint
development of the next-generation F-35 fighter jet being carried
out by Western countries.

For this reason, there has been a view in the government and the
Liberal Democratic Party that the government should allow the
country to engage in joint development with Western countries by
returning the scope of application of the three principles to the
original version.

There has also been a request from the United States to lift the ban
on weapons exports.

Minister of Economy, Trade and Industry (METI) Akira Amari, now
visiting Abu Dhabi in the United Arab Emirates, yesterday met with
Abu Dhabi National Oil Company C.E.O. Yusuf. The company president
said, "We are asking Japanese firms to continue to be involved in
oil development," implying he would allow four Japanese oil
companies, including Abu Dhabi Oil Company, a subsidiary of Cosmo
Oil, to extend and expand such rights. Those companies' concession
rights are to expire in 2012 one after another.

During a press briefing held at the end of his tour of that country,
Amari revealed that when he met with Crown Prince Sheikh Mohammed
bin Zayed al-Nahayan on Jan. 5, the crown prince made a similar
request. Amari continued: "This is the first time I've heard such
positive comments from high-level persons about the future of oil
concession rights."

Japan procures one million barrels, one-fourth of its total imported
oil, from Abu Dhabi. Of that amount, Japan obtains some 350,000
barrels from oil fields it independently developed. The Abu Dhabi
government-affiliated International Petroleum Investment Co. (IPIC)
last year decided to take a 20 PERCENT stake in Cosmo Oil.

Amari also met with UAE Energy Minister al-Hamili and the two shared
the concern about soaring oil prices that exceeded 100 dollars per
barrel. They also shared the perception that it is important that
oil producing countries will promote oil development, while oil
consuming countries will work on stabilizing oil prices through
energy-saving efforts.

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